8:00 JST, June 20, 2026

The era of globalization — when capital flowed freely across global markets and nations reveled in free trade — has reached a turning point. The central question now is how to reconcile free markets with economic security. Japan’s new entity for reviewing foreign investments will be a key test of whether its economic security policies succeed.

Prevailing economic ideologies shape economic policy, and Japan’s approach now reflects this shift toward economic security.

The period from the 1990s to the 2000s was an era of globalization, driven primarily by the United States.

In a global market where people, goods and capital flowed freely, the pursuit of efficiency was taken to extremes, leading to increased productivity and prosperity worldwide.

It was also the era of the “Washington Consensus,” a term coined in 1989 by British economist John Williamson. Led by the U.S. government, the International Monetary Fund and the World Bank, this approach promoted fiscal discipline and liberalization, advocating “small government” through privatization and other measures.

Although its primary objective was to foster economic development in developing nations, its influence also spread to developed countries, ushering in a wave of neoliberalism.

This period coincided with the era of Alan Greenspan, the U.S. Federal Reserve Board chair from 1987 to 2006 who enjoyed rock-star-level popularity.

To understand Japan’s economic security history, it is useful to look back at the first instance in which the government, under the Foreign Exchange and Foreign Trade Law, recommended that foreign investors stop their investments in a Japanese company. This episode occurred just before the financial crisis of fall 2008, which shook the world.

In April 2008, the Economy, Trade and Industry Ministry and the Finance........

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